Ch 6

Question 1

ratio analysis

Answer 1

quantitative analysis of financial statement items to help evaluate liquidity, solvency, profitability, efficiency

Question 2

vertical analysis

Answer 2

expresses financial information in relation to some base figure
ex: portion of total sales

Question 3

horizontal analysis

Answer 3

comparative changes about various financial statement line items over time

calculates and displays the dollar and percentage change in financial statements from one period to the next.

Question 4

dupont analysis

Answer 4

summarizes and disaggregates company performance (return on equity)
three component parts:
profit margin
asset turnover
financial leverage

Question 5

formula for profit margin

Answer 5

net profit/sales

Question 6

formula for asset turnover

Answer 6

sales/assets

Question 7

formula for financial leverage

Answer 7

assets/equity

Question 8

formula for ROE

Answer 8

roe = profit margin x asset turnover x financial leverage

Question 9

what are the visualizations for descriptive analytics

Answer 9

tables
bar chart
line chart
pie chart

Question 10

what analyses are used for descriptive analyses

Answer 10

vertical
horizontal
ratio
dupont